Medicaid Heist Uses Grandma As Bait

Federal prosecutors say some New York City senior day care centers have turned into **fraud factories** that use our elders as bait to strip hundreds of millions of dollars from Medicare and Medicaid.

Story Snapshot

Two Queens men are charged with a $120 million fraud involving adult day care centers and a pharmacy that bribed seniors and billed for care never provided.
Dr. Mehmet Oz and journalist Nick Shirley highlight Flushing, Queens, where social adult day care centers reportedly generated $2.1 billion in billings in three years and used kickbacks to draw in elderly patients.
Separate Brooklyn schemes total at least $68 million in fraud, with guilty pleas and detailed evidence of cash bribes, fake services, and laundered proceeds.
New York’s own audit found $285 million in questionable payments to social adult day care centers, raising serious oversight and public trust concerns.

Federal Cases Show Senior Day Care Centers Used To Steal From Taxpayers

Federal prosecutors have laid out a clear picture of how some adult day care operators in New York City allegedly turned care for seniors into a money machine. Inwoo “Tony” Kim and Daniel Lee of Flushing are charged with running a ten-year scheme through two social adult day care centers and a pharmacy. According to the complaint, they paid cash and supermarket gift cards to elderly Medicare and Medicaid patients, then billed the government for day care services and drugs that were medically unnecessary, never provided, or induced by these illegal kickbacks. Claims were even submitted for more patients than the centers were allowed to hold, showing a direct abuse of capacity limits.

To keep the cash flowing, prosecutors say Kim and Lee pulled large amounts of money out of bank accounts they controlled, turning taxpayer funds into a slush pool used to keep seniors on the hook. In total, Medicare and Medicaid paid about $120 million tied to this alleged scheme, money that should have gone to real care for vulnerable Americans. This case did not appear out of nowhere. It fits a broader pattern across the city where Social Adult Day Care centers are used as shells to bill for fake services, leveraging tight-knit immigrant communities and seniors who trust the people offering them “help.” For conservatives worried about government waste, this is a textbook example of how big programs with weak oversight become targets for organized fraud.

Brooklyn Fraud Schemes Reveal a Repeat Playbook

The Queens case is only one piece of a larger picture. In Brooklyn, federal prosecutors and the Office of Inspector General for the Department of Health and Human Services have described another social adult day care operation that defrauded Medicaid of about $68 million. In that scheme, operators and recruiters paid cash and gifts to seniors between 2017 and 2024 to steer them to specific day care centers and a home health company, then billed Medicaid for services that were never delivered. Two defendants have already pleaded guilty to conspiring to defraud Medicaid and to paying health care kickbacks, confirming that this was not a misunderstanding—it was a criminal plan.

The fraud mechanics look almost identical: recruit seniors with money or vouchers, enroll them using their Medicaid numbers, then bill for phantom visits and inflated services. Shell companies allegedly helped hide where the money went, making it harder for honest taxpayers to see how their dollars were drained. On top of these federal cases, an alleged $38 million adult day care scam in Brooklyn tied to community leaders shows the same mix of kickbacks and sham billing. For readers who worry that large government health programs invite abuse, these cases are strong evidence that fraudsters know how to exploit loose rules and slow enforcement.

Dr. Oz’s “Clubhouse For Criminals” Warning And Oversight Failures

Against this backdrop, Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz has warned that some New York City senior day care centers have become “clubhouses for criminals,” pointing especially to Flushing in Queens. Working with journalist Nick Shirley, Oz highlighted public data showing that 64 social adult day care centers operate within a one-mile radius, with about $2.5 billion in billings over three years and an estimated $2.1 billion from Flushing alone. Their investigation alleges that some centers bill for thousands of patients they cannot physically serve, while seniors are offered regular cash payments if they enroll and bring friends.

A New York State audit backs up concerns about how this sector is run. The state comptroller found over $285 million in questionable payments to social adult day care centers, including tens of millions paid to facilities that had already been terminated for fraud, waste, and abuse. New York is now spending hundreds of millions of dollars on senior day care programs, even as some centers are accused of bribing seniors with $500 monthly kickbacks that drop if they actually show up for services. While not every center has been charged with crimes, the pattern of cash bribes, fake attendance, and massive billing raises serious questions about state and local oversight—and about whether political leaders are truly serious about protecting taxpayer money and vulnerable seniors.